On perseverance, hard work and fiscal discipline...
(Speech of Jose Gerardo J. Guadarrama at the 2006 Commencement Exercises of Jaro National High School)
Part 2
The right set of values
From my parents came a very important set of values-perseverance, hard work and financial discipline from my mother, and community service and generosity of spirit from my father. It has since been enhanced by the basic American values of fairness, equality and respect for human dignity. These are the core values that Biscocho Haus lives by.
Perseverance
As I had mentioned before, Biscocho Haus is the product of my mother's entrepreneurial spirit. As far as I can remember, she was always into something... from ice candy to rice crispies, dulce gatas to banana marbles. She never ceased to augment the family's coffers, persevering until she hit pay dirt with biscocho.
Fiscal discipline and hard work - bootstrapping its way to growth
Biscocho Haus bootstrapped its way to growth. At that time, my parents really didn't have a lot of capital because there were eight of us children and two were in college, I had just graduated from high school and about to enter college, and my two younger sisters were in high school and elementary. Luckily, we already had an oven in our kitchen, so that was the first oven used in the business. As for the mixer, we only had a hand-held mixer at that time but my father improvised and created a stand out of the gooseneck of an old lampshade. That was the very first mixer used for making meringue, a mixer I had learned to be adept at because I prepared many batches of meringue using it whenever I was home from school in Manila.
During the first five years of the business, my parents hang on to their full-time jobs while growing the business at the same time. They funneled most of the income back into the business to invest in new equipment and to be used for working capital. Only when the business had grown enough in 1980 did my mother retire from Rural Bank of Iloilo City to devote full-time to the business.
Community service and generosity of spirit
I had mentioned before how my father's life was dedicated to community service and generosity of spirit. My mother may have been the entrepreneur; however, it was my father who came from a culinary family and many of the product ideas and "fine-tuning" of the recipes came from him. And he also was the one who coined our business name and designed our logo, which if you haven't noticed, has the letters J, G, O, B and H. They stand for Jalandoni Guadarrama Original Biscocho Haus. He was one of only three doctors in Jaro in the 1940s and 50s and was honored as the Most Outstanding Practitioner by the Philippine Medical Association, Iloilo Chapter, in 1958. For many years, he practiced medicine and treated his patients regardless of their ability to pay. My father was very much loved by the community of 30 years ago when almost everyone in Jaro and the surrounding areas knew him. I personally believe that the people of Jaro patronized Biscocho Haus in the early years because of his good deeds.
Crisis and Opportunity
However, it was not all smooth sailing for Biscocho Haus. Even with my mother devoting full-time to the business, it remained an entrepreneurial operation for many years, lacking systems, structure and controls. As my mother got older and her involvement in the business dwindled and eventually disappeared, the key ingredients of focus, control and fiscal discipline eventually vanished.
Instead of just focusing on Biscocho Haus, the family got involved in real estate, building rentals and a pensionne while incurring millions of pesos in loans and other obligations. Focus was gone because these operations were not synergistic. Because the business failed to make the transition from an entrepreneurial operation to a structured, professionally-managed enterprise, internal controls were non-existent.
True enough, within five years of incurring those huge debts, we were on the verge of financial collapse. The family was in a financial crisis and was staring at financial disaster in the eyes.
That was the compelling reason why I had to come home from America. I was the only one who could save the family from financial disaster, and I knew it. My forte in the United States was in financial management and much of my experience was in helping entrepreneurs make the transition to a structured, professionally-managed business environment. I had no choice but to come home even if I was already financially and professionally established in America.
But there are always opportunities in every crisis. The opportunity in this case was two-fold: the first one is for my family and the second one is for me, personally. Had it not been for the financial crisis the family was in, I wouldn't even have thought of coming back from America. My family wouldn't have been able to avail of my education and skills honed in Silicon Valley, the most dynamic area for entrepreneurs in the entire world. Personally, I wouldn't have experienced a most gratifying episode in my life. Biscocho Haus' and the family's crisis was one big case study, even bigger than any of the case studies I encountered when I was in business school. This ongoing case of crisis and opportunities utilizes the conglomeration of all my schooling in engineering and in graduate business school, and my work experience in manufacturing and financial management. The most gratifying part of it is that, the beneficiary is my family and the many people who have been positively impacted by the changes in the organization.
Coming home is not about money. There is a lot more money to be made in America if money were my motive. It is about giving back to the family and to the community that shaped me. For what it has become, Biscocho Haus will surely be an instrument in propagating my father's legacy of community service and generosity of spirit. As the company continues to progress, its current management envisions a socially responsible company that will push for the common good.
Many of you may not be able to pursue any more schooling after high school but that should not discourage you from following your dreams. My mother was only a high school graduate and much of her education was from the school of hard knocks, but that did not prevent her from pursuing her dreams and founding Biscocho Haus.